Solutions must start with middle class — overhaul tax code, reform healthcare

Now that the election is over and the American people have ushered in a new, historic era for our nation, campaign politics can take a back seat to the important task of rebuilding our economy. There are steps Congress can take in the short- and long-term to bolster economic security. The current administration should use its final weeks in office to be a partner toward this goal.

I recently chaired a hearing in the Ways and Means Committee on economic recovery, and the consensus was overwhelming: We need immediate action to help families and state and local governments overcome the challenges they are facing. Our key witness, New York Gov. David Paterson, spelled out the impossible choice he faces by saying, “A rescue package ... could make the difference between targeted, surgical spending reductions that will help heal our fiscal condition and massive and wide-ranging cuts that will cause irreparable damage to millions of families.”

Earlier this fall, the House passed a forward-looking recovery package that would alleviate some of the pressure on state and local governments and create jobs through investments in infrastructure. The package would provide resources to immediately begin “shovel-ready” construction projects to help improve our aging infrastructure and most importantly put folks back to work. The package would also extend unemployment benefits for the nearly 1.2 million workers who lost their jobs through no fault of their own and will lose their benefits by the end of the year. Extending these benefits is not only the moral thing to do; it makes good economic sense: Every dollar spent in unemployment benefits creates an estimated $1.64 in economic stimulus.

Sadly, this bill remains stalled in the Senate, with Republican senators ignoring the growing calls for additional recovery efforts. I sincerely hope that, now that we are past the fog of the election, they can return to Washington and help move this package forward to give vital relief to state and local governments and millions of families struggling through these tough times.

Congress will also begin work in January with hearings and legislation to provide tax relief to middle-class families. The specific form of this tax relief will emerge from ongoing discussions with congressional leaders and President-elect Barack Obama, but the American people should know that we understand the importance of swift action to put money back in their pockets and spur economic growth.

Millions of hardworking families are struggling to make ends meet with the skyrocketing healthcare, education and energy costs and dwindling incomes. Many now find themselves living under the threat of poverty, without the resources to keep a roof over their heads, put food on their table or send their children to school. Any solution to these problems must begin with the middle class, the backbone of our economy.

We can strike at the root of these challenges by addressing the healthcare crisis gripping our nation. The lack of affordable healthcare is a direct threat to our economic and national security that must be dealt with. We need to energize a partnership between government and corporations to help everyone realize that a healthier, better-educated, well-trained workforce is in the best interest of every American. I am glad that President-elect Obama and fellow leaders in the House and Senate understand the central role that healthcare plays in our national and economic security. I look forward to working with them in the coming months to tackle this growing problem.

Finally, we must restore fairness and equity to our tax laws and give middle-class families the permanent tax relief they deserve. Tax reform must achieve three main goals — the elimination of preferential loopholes, tax relief for the middle-class and a significant reduction in the corporate tax rate to create jobs and help American companies compete and win internationally. For too long, our tax code has been the playground of special-interest lobbyists.

The result has been a mess of loopholes that ship jobs overseas and reward a limited few at the expense of the rest. We need to rebuild our tax laws from the bottom up, beginning with the elimination of the onerous alternative minimum tax, which threatens millions of unsuspecting middle-class families each year. Once we simplify our tax laws to focus on rewarding hard work, middle-class families will emerge from the shadow of recent years with more money in their pockets to chase their dreams and strengthen our economy.

Rangel chairs the House Ways and Means Committee.